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Apple v. Samsung: Tech Trial of the Century

Smart phones and tablet computers are the central focus of the famous legal dispute between technology moguls, Apple and Samsung. In a nutshell, Apple alleged that Samsung copied the look and design of their cell phone and tablet products. On April 15, 2011, Apple filed suit against Samsung alleging infringement on three of Apple’s utility patents and four of their design patents. Apple also alleged that Samsung infringed on their trademark and trade dress by intentionally implementing them into their product line.[1] Apple accused Samsung of creating 28 devices which infringed on their intellectual property.[2] Apple was most adamant about its design patent for a “rectangular slab with rounded corners [i.e., the iPhone],” which they claim Samsung used in a number of their cell phone designs.[3] Meanwhile, Samsung filed a counter claim alleging that Apple infringed on their patents for wireless communications technology. [4]

The two companies first went to trial the following summer, each receiving 25 hours to present their case.[5] On August 24, 2012, the jury returned a verdict in favor of Apple.[6] The nine person jury found that Samsung had willfully infringed on Apple’s “utility, design patents for some (though not all) products…willful infringement on five of six [Apple] patents…the jury upheld Apple trade dress ‘983…[and the] jury found Samsung ‘ diluted’ Apple’s registered iPhone, iPhone 3, and ‘Combination iPhone’ trade dress on some products, not on others.”[7] Additionally, the jury found that Apple had not infringed on any Samsung utility patents. [8]Lastly, the jury found that Samsung’s monopolizing of markets related to the Universal Mobile Telecommunications System (UMTS) standard did not violate antitrust law. [9]In the end, Samsung was ordered to pay $1.05 billion ($1,049,393,540 to be exact) in damages to Apple.[10] In Apple, Inc. v. Samsung Elecs. Co., the court informs us that their analysis focused not on the function of Apple’s products, but on their visual characteristics. 2011 U.S. Dist. LEXIS 139049 (N.D. Cal. Dec. 2, 2011).[11] Samsung filed its appeal in the United States Court of Appeals for the Federal Circuit on October 2, 2012 requesting that Apple’s victory be thrown out.[12]A week after receiving the favorable jury verdict, Apple filed another lawsuit listing 17 additional Samsung products that allegedly violate Apple patents.[13] The four major products being cited are the Galaxy S III, Verizon Galaxy S III, Galaxy Note and Galaxy Tab 10.1.[14]

In December 2012, Apple sought a permanent injunction that would ban the sale of, what it believes to be, “knockoff” iPhones and iPads. [15]A permanent injunction is “a final order of a court that a person or entity refrain from certain activities permanently.” [16]Apple essentially asked to court to issue an order preventing Samsung from ever designing, manufacturing and selling smartphones and tablets that resemble their brand. This may have been bit overreaching, which could possibly explain why the U.S. District Court for the Northern District of California declined to grant the injunction.[17]Apple appealed the decision and, on November 18, 2013, the U.S. Court of Appeals ruled that “the lower court abused its discretion in denying Apple’s request for an injunction of Samsung devices for infringing utility patents and asked it to reconsider.” [18] The U.S. Court of Appeals also said that “the lower court relied too much on evidence that Apple licensed the patents to others as a reason to order financial damages rather than an injunction, saying that Samsung was different because it was Apple’s primary competitor.” [19] However, the appeals court upheld the lower court’s refusal to order an injunction on the design patents.[20]

Before Samsung could begin making payments on their $1.05 billion IOU, Judge Lucy Koh, the federal Northern District of California judge presiding over two Apple v. Samsung cases, vacated a large portion of the $1.05 billion in damages awarded to Apple.[21] Judge Koh ruled that the jury made errors in some of their calculations and deducted $450 million from the previous verdict.[22] This is more than fair, considering Judge Koh’s belief that “the notice date concerning certain patents-in-suit… was too early because only one of the patents, the rubber-banding patent, had actually been listed in a presentation Apple gave to Samsung in 2010.”[23]As a result, a new trial on damages must be held. This trial will consist of a new jury who will again review the evidence presented and try to assess the monetary damages of Samsung’s alleged infringement. The new damage amount could be higher, lower, or the same as the current amount.

In sum, this case is far from over. Apple later asked the court for “supplemental damages covering the period from trial to final judgment and for prejudgment interest.”[24] Apple proposed the prime rate, while Samsung counter-proposed a lower rate, and the court, rightfully, sided with Samsung.[25] Apple also requested a conditional enhancement of up to $155 million, but the court denied that request as well.[26] It is obvious that Apple’s attorneys are pulling every legal stop at their disposal in order to prevent Samsung from producing cell phones and tablets that resemble the iPhone. Unfortunately, it is likely that Apple will remain monetarily victorious, even after all is said and done, because of their initial ability to prove various degrees of product infringement by Samsung. However, the future of this legal debate remains uncertain. Apple and Samsung will more than likely continue to appeal any future rulings that are unfavorable to them, as they are set for yet another trial in April 2014.[27] Therefore, it is possible that the tech trial of the century could possibly last a century.